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The run on silver has officially started

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This is very important news for all coin collectors so I am putting this single post in a thread outside "On the Cusp"

 

In the last week silver has jumped dramatically in price (about US$5 per ounce), breaking way from the past downward manipulation of JP Morgan and HSBC.

 

If you look at silver over the last few months you will see how the steady rise has in the last few days straightlined up - now over US$34 per ounce after a brief period of shorting by the big US banks.

 

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In my view there are several factors now pointing to a silver price over US$50 in the near future.

 

These include in no particular order:

 

  1. The expose on the manipulation of silver and gold prices by the US Federal Reserve (keeping prices low)
  2. The naked short selling of silver by JP Morgan and HSBC (on behalf of the Federal Reserve) - ie no physical silver backing up their paper trades
  3. The shortage of physical silver in the market place today because of its industrial role
  4. Spreading unrest in the Middle East
  5. The traditional gold:silver ratio of 1:15 currently standing at 1:41
  6. Growing inflation and investor demand
  7. The coming collapse of banks and central banks

IMPORTANT NOTE: The Federal Reserve bank holds NO physical silver in its vaults but it does hold hundreds of millions of ounces of gold (unaudited) so this figure could be a charade as well.

 

Expect extreme volatility for silver on the way up as the big banks now being hung out to dry go to desperate measures to save their sinking ship.

 

If Comex defaults on supplying silver on paper trades (which is anticipated) expect a major run on banks around the world and inflation to escalate dramatically.

 

Kind regards

 

Scott Balson

Edited by ndoa18

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jwither

The traditional price ratio of silver to gold as you put it, is not that meaningful in a world where the price of neither is fixed. And even when gold was fixed, there were many times and long periods of time when the price ratio went well above 16 which is what it was when the USD was established in 1792.

 

As you should know, the price ratio has risen when the price of both metals has declined and contracted when the price of both has risen. That happened in 1980 and it is hapepning now. Conversely, the ratio rose to over 100 in the 1930's when silver fell to 25 US cents and to about 80 around 2001.

 

So yes, I would say that as factor to consider, it CAN be useful. But to say that the "real" or "fair" value of silver versus should be a "X" is simply not true. There is no such thing as absolute value or even an absolute relative value. ALL values are relative.

 

Given that my price expectations for silver have been incorrect, I will agree with you that if both continue to rise, that the ratio will continue to contract. But whoever has a large position in it now had better make sure they are not overexposed because of its volatility. Take a look at the parabolic move dosplayed in a cuirent chart and see what time period it most closely resembles.

 

As for the coming collapse of banks and central banks, I'm not getting into your premises that you use to support this claim because I reject them outright. But Central banks cannot collapse in the same manner as their private counterparts do. They can become TECHNICALLY insolvent but cannot go bankrupt like a private entity because, as you know, they do not have to EVER redeem their liabilities which is why fiat currency is a farce.

 

You may have read the same reports I have that the US FRB has made a "back room" deal to shift its losses onto the US Treasury that may result from "QE".. If true, I would say that the primary reason for that is twofold. First, presumably the FRB could not pay its permitted 6% dividend to its members even though in absolute terms, that is a pittance. But second, it's probably more designed to disguise the embarassment of the public perception that a technical insolvency would create. (The fact that anyone has or ever had confidence in central banks or that they are still held in such high regard is itself absurd, but that is a subject for another day.)

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Fiat Money is a farce

 

Hi John

 

You say....

They can become TECHNICALLY insolvent but cannot go bankrupt like a private entity because, as you know, they do not have to EVER redeem their liabilities which is why fiat currency is a farce.
I totally agree ... for those who have not followed "On the cusp" the money you use today (Rands) is, in reality, FIAT money and worth less than the paper it is printed on regardless of the value imprinted on it.

 

PS Isn't it interesting that the US Treasury in a public web page document (according to the web page last updated on 9 April 2010) published its (unaudited) gold stocks for end of January 2011.. see: http://www.fms.treas.gov/gold/current.html - they must be psychic or maybe it is just more fraud at the highest levels.

 

I will answer any more posts on this thread in "On the Cusp".

 

Kind regards

 

Scott Balson

Edited by ndoa18

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